After all the hype, Facebook’s first day on the stock market was lukewarm with shares barely holding above the initial $US38 price on its opening day.
Facebook closed the day at $US38.23 but still managed to raise $16 billion to place the value of the eight-year-old company at $104bn.
It is now the most valuable US company ever to go public.
Facebook’s shares opened at $42 but fell back to the initial $38 after just half an hour.
Mark Zuckerberg, the 28-year-old Facebook founder and CEO, rang the opening bell remotely from company headquarters in Palo Alto, California – just outside San Francisco.
Facebook sold 20 per cent of the company’s stock in the IPO and made thousands of employees instant millionaires as well as a handful of billionaires.
Zuckerberg’s stake in Facebook is now worth more than $19bn and makes him 29th richest person in the world.
U2 frontman Bono’s 2.3 per cent stake of Facebook, purchased through his company Elevation Partners for $90m in 2009, is now worth $1.5bn.
Facebook’s founding president Sean Parker, who created the disruptive music sharing service Napster before joining the social networking site, own 3.9 per cent of the company which is now worth $2.5bn.
So is Facebook a good investment?
Many business investors are reluctant to put their money down because Facebook doesn’t make anything or sell anything and only has minimal advertising on the site.
Companies like Apple have steadily increased in value because it is constantly releasing innovative products.
WhisperNumber.com polled more than 1,100 registered traders and investors with 71 per cent saying they didn’t consider Facebook stock as a long-term investment.
WhisperNumber.com founder and president John Scherr said: “I think traders think there’s more hype than actual business. While Facebook has done a great job gaining users and ad revenue, we’re hearing traders using the word “fad” and “remember MySpace”.
Will the Facebook public share offering make money for its investors? Time will tell.
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